Oregon Public Broadcasting

The U.S. Senate is debating a bailout bill for Wall Street banks Wednesday. It's backed by President Bush and Treasury Secretary Hank Paulson.

By the end of the day, the Senate is scheduled to vote on the $700 billion bailout package and most expect it to pass. But afterwards, the bill must still be approved by the U.S. House of Representatives, which rejected its previous incarnation on Monday.

As Ethan Lindsey reports,  that House vote thrust one Oregon congressman into the national spotlight.

After the U.S. House surprised most observers by rejecting the bailout, Rep. Peter Defazio went on a media victory tour, of sorts.

Here he is on NPR’s All Things Considered.

Peter Defazio: “I was stunned, I thought the fix was in. They got a lot fewer Republican votes than they wanted."

He was on the public radio business program Marketplace, Fox Business Channel, CNN’s Lou Dobbs Tonight, and here, on the financial TV station CNBC.

CNBC: “Congressman Peter Defazio is a Democrat from Oregon and joins us from the nation’s Capitol this morning. Congressman Defazio thanks for joining us./Thanks./You voted against the plan on Monday, yes?/Yes, emphatically./Is anything the Senate’s putting together tonight going to convince you or change your view?/No, as far as I know it’s the same flawed plan.”

And before all that came a press conference that was carried live on several cable news channels.

Rep. Peter Defazio: “I have no regrets. It’s one of the best votes of my career, and it restored my faith in the democratic process, and in the people’s House of Representatives.”

Defazio has become something of the central Democratic voice in opposition to the administration-backed bailout.

But he is also working with Republicans who oppose to the package, though their issues with it are entirely different.

John Shadegg is a Republican Congressman from Arizona. He worked with Defazio, but he told CNN that he is probably going to vote for the new bill.

Rep. John Shadegg: “I am strong leaning voting for that. In this business it's trust but verify, and I want to read the bill tonight.”

Politically, more Republican votes means supporters say they don’t need Defazio.

But that doesn’t mean they haven’t tried to get him.

Supporters added a couple of extras to the legislation – including the county timber payments program that would send more than $200 million to Oregon’s rural counties.

Peter Defazio: “There is nothing more important to my district than county payments. But I am not going to vote to authorize borrowing $700 billion for risky bets. 700 billion reasons to vote no, and few good reasons to vote yes, I’ve gotta vote no.”

At the press conference, Defazio and 7 other progressive Democrats, proposed some legislative alternatives.

Several of those items will actually be amendments to the original bailout, including raising the size of bank account deposits the federal government insures.

But most of Defazio’s ideas have gained little traction. For one, he wants to pay for the bailout by enacting a securities transaction tax.

Robert Pollin: “The simplest way to think about it is as a sales tax. It’s a sales tax on any investment transaction.”

Robert Pollin is a professor of economics at the University of Massachusetts at Amherst, and a backer of such a tax.

Robert Pollin: “If you have a very high tax, you can completely shut down trading, because nobody wants to pay the tax. If you have a very low tax, you can raise revenue but you won’t discourage any trading. The trick is to find a midpoint whereby you do discourage speculative trading but you also generate revenue.”

Critics, including Republicans and investors, seem to have successfully kept that tax out of the bill.

And as it stands now, it looks as if most of Defazio’s other significant changes will not get voted on.

When asked if it was all worth it, the Springfield Democrat says he is tired, but he’s gotten more feedback this week than in all of his 22 years in Congress.

Peter Defazio: “We got a lot of calls about the war. We got a lot of calls about the Clinton impeachment. But in a mere week, we’ve had 6000 phone calls and emails. I was walking over at the Capitol and I had some tourists who stopped me. It’s why I am here. I cam here to represent regular folks. I know that when you take on the entire establishment of the United States, its not real likely that the people are going to win, but for a few days, we did.”

If the Senate does approve the measure, as expected, the House is scheduled to vote on Friday. Defazio says he will almost certainly vote ‘no.’